5.1
CHAPTER 17: FINANCIAL CONDITION ANALYSIS Calculate the following ratios based upon data The Heart Hospital financial statements. For each ratio, provide a
ief ratio analysis and comparative analysis.
Homework Problem 5.1 Indicator Analysis: Briefly explain what the indicator means
Comparative Analysis Compare Riverside with peer group averages and explain how it did compared to other comparable hospitals.
RATIOS Heart Hospital Peer Group Average
The Heart Hospital
Statement of Income and Retained Earnings PROFITABILITY
Year Ended December 31, 2020 Total Margin 15.0% Indicator Analysis:
(in thousands) Comparative Analysis
Net patient service revenue $ 64,505
Operating Margin 16.0% Indicator Analysis:
Personnel expense $ 21,707 Comparative Analysis
Medical supplies and drugs 15,047
Other operating expenses 9,721
Interest expense 1,322
Depreciation 2,625 ROA (return on assets) 22.5% Indicator Analysis:
Total operating expenses $ 50,422 Comparative Analysis
Income from operations 14,083
Non-operating income $ 159
Net income $ 14,242 ROE (return on equity) 37.6% Indicator Analysis:
Comparative Analysis
Green Valley Healthcare, Inc. LIQUIDITY RATIOS
Balance Sheet
Year Ended December 31, 2020 Cu
ent Ratio 2.0 Indicator Analysis:
(in thousands) Comparative Analysis
Cash and equivalents $ 14,202
Net patient accts receivable 5,918 Days Cash on Hand 85 Indicator Analysis:
Supplies inventory 1,211 Comparative Analysis
Prepaid expenses and other cu
ent assets 1,429
Total cu
ent assets $ 22,760
Property and equipment $ 47,311 Debt Ratio 40.0% Indicator Analysis:
Less accumulated depreciation 13,542 Comparative Analysis
Net property and equipment $ 33,769
Other assets $ 901
Total assets $ 57,430 Debt to Equity Ratio 0.67 Indicator Analysis:
Comparative Analysis
Accounts payable $ 1,910
Accrued compensation and benefits 2,543
Other accrued liabilities 1,843 Times Interest Earned 5.0 Indicator Analysis:
Cu
ent portion of long-term debt 2,064 Comparative Analysis
Total cu
ent liabilities $ 8,360
Long-term debt $ 21,640
Total liabilities $ 30,000 ASSET MANAGEMENT RATIOS
Owners' equity $ 27,430
Total liabilities & equity $ 57,430 Fixed Asset Turnover 1.4 Indicator Analysis:
Comparative Analysis
Total Asset Turnover 1.50 Indicator Analysis:
Comparative Analysis
Days in Patient AR 20.0 Indicator Analysis:
Comparative Analysis
Average Age of Plant 11.5 Indicator Analysis:
Comparative Analysis
5.2
CHAPTER 17: FINANCIAL CONDITION ANALYSIS
Homework Problem 5.2
RIVERSIDE HOSPITAL OPERATING DATA
OPERATING DATA
Net inpatient revenue $118,449,000
Net outpatient revenue $128,650,000
Net patient service revenue $247,099,000
Inpatient operating expenses $116,265,050
Total salaries $117,914,830
Total discharges 21,475
Inpatient days 123,579
# licensed and staffed beds 500
Total FTEs 3,650
Inpatient FTEs 1,725
Calculate the following ratios based upon the data above For each ratio, provide a
ief ratio analysis and comparative analysis.
Indicator Analysis: Briefly explain what the indicator means
Comparative Analysis Compare Riverside with peer group averages and explain how it did compared to other comparable hospitals.
OPERATING INDICATOR ANALYSIS Heart Hospital Industry Average
Profit per Discharge $73 Indicator Analysis
Comparative Analysis
Net Price per Discharge $5,965 Indicator Analysis
Comparative Analysis
Outpatient Revenue % 58.5% Indicator Analysis
Comparative Analysis
Occupancy Rate 56.6% Indicator Analysis
Comparative Analysis
Average Length of Stay 4.7 Indicator Analysis
Comparative Analysis
Inpatient FTEs per Occupied Bed 5.6 Indicator Analysis
Comparative Analysis
Salary per FTE $33,977 Indicator Analysis
Comparative Analysis